Agency sharply cuts estimates of gas in shale

Sunday

WASHINGTON - Just how much natural gas is trapped underground in the United States?

WASHINGTON - Just how much natural gas is trapped underground in the United States?

The difficulty and uncertainty in predicting natural-gas resources was underscored last week when the Energy Information Administration released a report containing sharply lower estimates. The agency estimated that the nation has 482 trillion cubic feet of shale gas, down from the 2011 estimate of 827 trillion cubic feet - a drop of more than 40 percent.

The report also said that the Marcellus region, a rock formation under parts of Ohio, New York, Pennsylvania and West Virginia, contains 141 trillion cubic feet of gas. That represents a 66 percent drop from the estimate of 410 trillion cubic feet offered in the agency's previous report.

The agency said the downward revisions were a result of more data being available.

"Drilling in the Marcellus accelerated rapidly in 2010 and 2011, so that there is far more information available today than a year ago," its report said.

Under the agency's new estimates, the Marcellus shale, which was previously thought to hold enough gas to meet the nation's demand for 17 years at the current consumption rate, contains instead a six-year supply.

The report comes five months after the U.S. Geological Survey released an estimate of 84 trillion cubic feet for the Marcellus shale.

The estimates are important because they underpin policy decisions on energy subsidies and exports. Market analysts look to these estimates in making investment decisions.

Previously inaccessible, shale gas has been unlocked in recent years by advances in a drilling technology known as hydraulic fracturing, or "fracking." These advances have prompted a drilling frenzy .

Despite the lower estimates, the agency's report said that shale gas will continue to have a growing impact on the broader energy market. The share of natural gas produced by drilling in shale formations is projected to more than double, from 23 percent in 2010 to 49 percent in 2035, the report said. The U.S. also will become a net exporter of liquefied natural gas by 2016, while natural-gas prices are expected to remain low for more than a decade, the report said.

Energy companies are likely to be undaunted by the new, lower estimates because they are confident that whatever the total amount of available gas, technology will improve over time so that they can access the gas more efficiently and profitably.

In his State of the

Union address, President Barack Obama said the

U.S. has a nearly 100-year supply of natural gas, including that tapped by